Category: Games

*Queen’s Gambit* (no real spoilers in this post)

I’ve now seen a few episodes, and I have a few comments on the chess:

1. No player, including Magnus Carlsen, can become that good that quickly, without a lot of learning and losing along the way.

2. They show the players moving too fast, though for dramatic reasons this is easy enough to understand.

3. The Sicilian was indeed very popular in 1963, but not quite that popular.

4. It captures the feel of earlier U.S. chess tournaments very well, noting that my own participation came later but things didn’t change much.

5. At the time the Rossolimo was in fact an unusual response to the Sicilian, though it is not now.  The show got this right (the protagonist claims she was very surprised by 3.Bb5) — don’t be fooled by the subsequent evolution of the game.

Dramatically, I would say it is “decent and watchable,” and the clothes and hotel scenes are good.  The characterization of the mother does not feel entirely consistent.  There is an underlying autism theme, mostly handled well, though mainstream reviewers seem to be thrown off the scent by the woman’s charm and good looks.  I will let you know if I have further observations.

The non-linearity of Covid-19 response

My colleague Bryan Caplan has some comments on the topic, here is also Robin Hanson here and here.  I think both are trying to fit the Covid battle too much into a framework of equating marginal benefit and marginal cost.  While that MB = MC condition is true tautologically for my views as well, I see it as a less useful framing given the non-linearities involved.  It is only a modest oversimplification to assert that either we are beating back Covid or it is beating back us, and we can’t just choose a point along a smooth curve.  You end up on one side of the distribution or another, if you are losing you are not really in control.

Here is a manipulative partisan tweet, but it still gets at a true point:

Since America is not a small, isolated island we don’t have the Kiwi option, but you can nonetheless see the two “winning” and “losing” options embedded in that comparison.

I think back to when I was 12 or 13, and asked to play the Avalon Hill board game Blitzkrieg.  Now, as the name might indicate, you win Blitzkrieg by being very aggressive.  My first real game was with a guy named Tim Rice, at the Westwood Chess Club, and he just crushed me, literally blitzing me off the board.  I had made the mistake of approaching Blitzkrieg like chess, setting up my forces for various future careful maneuvers.  I was back on my heels before I knew what had happened.

Due to its potential for exponential growth, Covid-19 is more like Blitzkrieg than it is like chess.  You are either winning or losing (badly), and you would prefer to be winning.  A good response is about trying to leap over into that winning space, and then staying there.  If you find that current prevention is failing a cost-benefit test, that doesn’t mean the answer is less prevention, which might fail a cost-benefit test all the more, due to the power of the non-local virus multiplication properties to shut down your economy and also take lives and instill fear.

You still need to come up with a way of beating Covid back.

The changing culture that is Norway?

After many years of decline in violent behavior among adolescents in several Western countries, recent official statistics indicate a possible trend change. So far, knowledge on how this change is related to co-occurring changes in leisure time activities is limited. Using two cross-sectional surveys from Oslo, Norway, this study found substantial increases in the prevalence of physical fighting from 2015 (N = 23,381; 51.6% girls) to 2018 (N = 25,287; 50.8% girls) in junior and senior high school. The rise in fighting was related to co-occurring changes in several leisure activities, including increasing time spent unsupervised by adults, rising digital media use, and rising cannabis use. The study emphasizes the importance of considering leisure time activities when addressing adolescent misbehavior.

In the aggregate data:

After a steady decline from 2007 to 2013 in police registered violent crime among adolescents under the age of 18 in Oslo, the capital of Norway, the number of violent crimes increased from 259 to 499 from 2013 to 2018, an increase
of 93% in five years.

Table 2 indicates that changes in “migration background” do not seem large enough to explain that evolution, even if that were the significant factor.  And from the survey data:

In junior high school, the prevalence rates for boys increased from 31.4% in 2015 to 38.1% in 2018 and from 8.9% to
13.1% for girls…

Here is the piece by Lars Roar Frøyland, Anders Bakken, and Tilmann von Soest, via the excellent Kevin Lewis.

Robert B. Wilson, Nobel Laureate

Here is his home page.  He has been at Stanford Business School since 1964, and born in Geneva, Nebraska.  Here is his personal website.  Here is his Wikipedia page.  He has a doctorate in business administration from Harvard, but actually no economics Ph.D. (bravo!)  Here is the Nobel designation.

Most of all Wilson is an economic theorist, doing much of his most influential work in or around the 1980s.  He is a little hard to google (no, he did not work with Philip Glass), but here are his best-cited papers.  To be clear, he won mainly for his work in auction theory and practice, covered by Alex here.  But here is some information about the rest of his highly illustrious career.

He and David Kreps wrote a very famous paper about deterrence.  Basically an incumbent wishes to develop a reputation for being tough with potential entrants, so as to keep them out of the market.  This was one of the most influential papers of the 1980s, and it also helped to revive some of the potential intellectual case for antitrust activism.  Here is Wilson’s survey article on strategic approaches to entry deterrence.

Wilson has a famous paper with Kreps, Milgrom, and Roberts.  They show how a multi-period prisoner’s dilemma might sustain cooperating rather than “Finking” if there is asymmetric information about types and behavior.  This paper increased estimates of the stability of tit-for-tat strategies, if only because with uncertainty you might end up in a highly rewarding loop of ongoing cooperation.  This combination of authors is referred to as the “Gang of Four,” given their common interests at the time and some common ties to Stanford.

His 1982 piece with David Kreps on “sequential equilibria” was oh so influential on game theory, here is the abstract:

We propose a new criterion for equilibria of extensive games, in the spirit of Selten’s perfectness criteria. This criterion requires that players’ strategies be sequentially rational: Every decision must be part of an optimal strategy for the remainder of the game. This entails specification of players’ beliefs concerning how the game has evolved for each information set, including information sets off the equilibrium path. The properties of sequential equilibria are developed; in particular, we study the topological structure of the set of sequential equilibria. The connections with Selten’s trembling-hand perfect equilibria are given.

Here is a more readable exposition of the idea.  This was part of a major effort to figure out how people actually would play in games, and which kinds of solution concepts economists should put into their models.  I don’t think the matter ever was settled, and arguably it has been superseded by behavioral and computational and evolutionary approaches, but Wilson was part of the peak period of applying pure theory to this problem and this might have been the most important theory piece in that whole tradition.

From Wikipedia:

Wilson’s paper “The Theory of the Syndicates,”JSTOR 1909607 which was published in Econometrica in 1968 influenced a whole generation of students from economics, finance, and accounting. The paper poses a fundamental question: Under what conditions does the expected utility representation describe the behavior of a group of individuals who choose lotteries and share risk in a Pareto-optimal way?

Link here, this was a contribution to social choice theory and fed into Oliver Hart’s later work on when shareholder unanimity for a corporation would hold.  It also connects to the later Milgrom work, some of it with Wilson, on when people will agree about the value of assets.

Here is Wilson’s book on non-linear pricing: “What do phone rates, frequent flyer programs, and railroad tariffs all have in common? They are all examples of nonlinear pricing. Pricing is nonlinear when it is not strictly proportional to the quantity purchased. The Electric Power Research Institute has commissioned Robert Wilson to review the various facets of nonlinear pricing.”  Yes, he is a business school guy.  Here is his survey article on electric power pricing, a whole separate direction of his research.

Here is his 1989 law review article about Pennzoil vs. Texaco, with Robert H. Mnookin.

Wilson also did a piece with Gul and Sonnenschein, laying out the different implications of various game-theoretic conjectures for the Coase conjecture, namely the claim that a durable goods monopolist will end up having to sell at competitive prices, due to the patience of consumers and their unwillingness to buy at higher prices.

Wilson was the dissertation advisor of Alvin E. Roth, Nobel Laureate, and here the two interview each other, recommended.  Excerpt:

Wilson: As an MBA student in 1960, I wrote a class report on how to bid in an auction that got a failing grade because it was not “managerial.”

And here is an Alvin Roth blog post on the prize and the intellectual lineage.

The bottom line?  If you are a theorist, Stockholm is telling you to build up some practical applications  — at the very least pull something out of your closet and sell it on eBay!  A lot of people thought Roberts and maybe Kreps would be in on this Prize, but they are not.  The selections themselves are clearly deserving and have been “in play” for many years in the Nobel discussions.  But again, we see the committee drawing clear and distinct lines.

Let’s see what they do next year!

The game theory of SCOTUS nominations

Despite the conventional wisdom that Trump would surely nominate a judge to secure a conservative majority that would ultimately overturn Roe v. Wade, getting that judge successfully confirmed would diminish Trump’s reelection prospects (by energizing the Democratic base to vote for leaders who would pack the court or ratify PR and DC as states). But Trump doesn’t care a whit about abortion, much less ideology. He only cares about his power and his reelection. His incentive, it seems to me, is to choose a weak nominee who will surely fail confirmation or a nominee whose confirmation will be deferred post-election. If the nomination is rejected, the Democrats will be seen as obstructionists and the Republican base will be energized. A deferred confirmation, in contrast, will act as a carrot that Trump can dangle in front of congressional Republicans, who will more strongly campaign for him. In either case, an unsuccessful confirmation will work in Trump’s favor, while a confirmed conservative will act against his reelection interests. Such a maneuver by the Trump campaign can, of course, only happen surreptitiously, because it would anger both Democratic and Republican leadership to be manipulated this way.

That is from Shiran Pasternak in my email.

The greatest gaming performance ever?

Or is chess a sport?

First Magnus Carlsen “privatizes” chess competition, naming the major tournament after himself, setting all of the rules, and becoming the residual claimant on the income stream.

He reshapes the entire format into a seven set, four months-long series of shorter tournaments, consisting of multiple games per day, 15 minutes per player per game, with increment.  It seems most chess fans find this new format far more exciting and watchable than the last two world championship matches, which have featured 22 slow draws and only two decisive games (with the title decided by rapid tiebreakers in each case — why not just head to the rapids?).

Magnus won all but one of the “sets” or mini-tournaments, along the way regularly dispatching the game’s top players at an astonishing pace, often tossing them aside like mere rag dolls.  Even the #2 and #3 rated players — Caruana and Ding Liren — stood little chance against his onslaught.  Carlsen kept on winning these mini-tournaments against fields of ten players, typically all at a world class level.

A Final Four then led to a 38-game, seven-day showdown between Carlsen and Hikaru Nakamura, not decided until the very last set of moves yesterday.  Note that at the more rapid pace Nakamura may well be a better player than Carlsen and is perhaps the only real challenge to him (at slower classical speeds Nakamura would be in the top twenty but is not at the very top of the rankings).

Nonetheless Carlsen prevailed.  Nakamura had the upper hand in terms of initiative, but in the final five-minute tie-breaking round, Carlsen needed to pull out 1.5 of the last 2 points, which indeed he did.  He drew by constructing an impregnable fortress against Nakamura’s Queen, and in the final “sudden death Armageddon” round a draw is equivalent to a victory for Black.

Along the way, at the same time, Magnus participated in Fantasy Football, competing against millions, at times holding the #1 slot and finishing #11 in what is a very competitive and demanding endeavor.

My Conversation with Annie Duke

Here is the transcript and audio, here is the opening summary:

Annie joined Tyler to explore how payoffs aren’t always monetary, the benefits and costs of probabilistic thinking, the “magical thinking” behind why people buy fire insurance but usually don’t get prenups, the psychology behind betting on shark migrations, how her most famous linguistics paper took on Steven Pinker, how public policy would change if only the top 500 poker players voted, why she wasn’t surprised to lose Celebrity Apprentice to Joan Rivers, whether Trump has a tell, the number one trait of top poker players, and more.

Here is one bit from Annie:

DUKE: So when I went on my first date with my husband, my brother and brother-in-law immediately decided to make a market, and it was whether we were going to get married. Now to be fair, my husband and I — before we went on our first date, we’d been friends. Both my brother and my brother-in-law knew my eventual husband, but this is when we’re going on our first date. They make a market. I think that my brother-in-law ended up bidding 23.

My brother then called me up, cracking up, that my brother-in-law had bid 23 when we hadn’t been on a first date yet. And I then started laughing at my brother, said, “Well, that means you had to bid 22. Why are you laughing at him? You somehow bid 22. It’s our first date.” Now, that’s because we’re all people who sort of think this way. And so this sort of becomes the fun of the friendship, but there are other people . . .

And this from Annie:

DUKE: My suspicion is that if only the top 500 poker players voted, people would be thinking a lot more about edge cases — where things could go wrong, for sure, because poker players just are obsessed with that. I think that there would be more long-termism as opposed to short-termism, again, because you have to be obsessed with that as a concept. I think that people would be thinking about “What are the unintended consequences? How does this look?”

Another thing that’s really important that poker players think about is, “If I put this policy in that looks like it’s awesome, how can someone come in and find the cracks in it so that it can turn into something bad?” I feel like the top 500 players would definitely be thinking in that way more.

You will have to read or hear the dialogue to take in my many good questions.

Solve for the equilibrium

What might be some alternate (if possibly slightly unfair) titles?  How about

“A Swede by Any Other Name” or “America > Sweden”?

“Refuting Friedman-Savage, convexity all over”

“Their capitalist bosses made them turn out”

“They all supported lockdown in the poll”

What else?

VTEKL.

What should I ask Annie Duke?

I will be doing a Conversation with her.  Here is part of her Wikipedia page:

Anne LaBarr Duke (née Lederer; September 13, 1965) is an American professional poker player and author. She holds a World Series of Poker (WSOP) gold bracelet from 2004 and used to be the leading money winner among women in WSOP history (a title now held by Vanessa Selbst). Duke won the 2004 World Series of Poker Tournament of Champions and the National Heads-Up Poker Championship in 2010. She has written a number of instructional books for poker players, including Decide to Play Great Poker and The Middle Zone, and she published her autobiography, How I Raised, Folded, Bluffed, Flirted, Cursed, and Won Millions at the World Series of Poker, in 2005.

Duke co-founded the non-profit Ante Up for Africa with actor Don Cheadle in 2007 to benefit charities working in African nations, and has raised money for other charities and non-profits through playing in and hosting charitable poker tournaments. She has been involved in advocacy on a number of poker-related issues including advocating for the legality of online gambling and for players’ rights to control their own image.

She also has a new book coming out this fall, How to Decide: Simpler Tools for Making Better Choices.  So what should I ask her?

The new economics of chess

I just finished watching one of Chess24.com’s Magnus Carlsen-affiliated rapid on-line chess tournaments, when today (a day later?) I see that another tournament has started.  And with Magnus himself playing, as well as other world-class players.  Note that Magnus both plays in these tournaments as the #1 attraction, and he owns an equity share in them, albeit with other investors.

So I’ve been trying to model the production of chess services in my mind.

I start with the point that viewers care much more about live, fresh games than games from a week ago.  Many sports of course operate on this same basis.

The second point is that most chess players have a relatively low opportunity cost of time, Rogoff and Kasparov excepted, plus some chess players can substitute into poker for profit (and may have quit chess already).  In fact what they do in their spare time is to…play chess!  Often with each other, and often on-line.  So if you offer to pay them some amount for doing basically the same, they will sign up.  Especially during a pandemic when many of them are trapped under relatively severe quarantines.

It is also the case that a chess player can play many days in the year, perhaps not every day, but you really can play a lot without tearing your rotator cuff.

It then seems the equilibrium is a much higher supply of chess tournaments, especially since on-line play removes some of the previous barriers to entry, such as needing a venue and some physical infrastructure.

You might even end up with a kind of Malthusian equilibrium, where the supply keeps on expanding to meet a fairly low marginal cost.

But this is a “superstars” kind of competition, and so the returns will go to the scarce factor.  That scarce factor is Carlsen himself, who garners far more attention than any other player.  And as noted he is an equity holder in this venture and as a player he has been winning the #1 prize money.  Over time, you might expect the returns of some of the other players — maybe in the top ten but not so famous or glamorous — to approach the Malthusian level.  Perhaps much of the public doesn’t care if Magnus plays #9 or #16, who in any case are only a small number of rating points apart.

Notice how well Magnus Carlsen understands reputation and internet production.  He keeps on posting “Banter Blitz” videos on YouTube, which show him playing speed chess on-line and commenting on the games as they proceed.  He dramatically expanded the supply of chess tournaments, which he earns income from.  He already was “the scarce factor,” and he has dramatically expanded the supply of attention aimed his way.  He understands that successful internet production is frequent production.

On-line chess viewing is way up (NYT) with the pandemic, and also because of these efforts.

Do not underestimate Magnus Carlsen.  He has been #1 in classical chess, rapid, and blitz, all at the same time.  He is a huge YouTube star in chess.  He has won a tournament about chess trivia, and he has been #1 in fantasy football for the whole world (not an easy feat).

And now he is bringing an economic revolution to chess, with himself as the #1 labor and equity earner at the same time.

Is the coronavirus making UBI look better?

My last Bloomberg column was co-authored with Garry Kasparov, here is one excerpt:

Another positive sign for UBI is that most Americans seem keen to return to their workplaces. One fear has been that UBI would lead to a couch-potato culture, with people choosing to stay at home even when they’re finally able to leave. But blue-collar service workers are continuing to brave the front lines even when faced with reasonably high risks of infection. They are not trying to get fired so they can collect unemployment. White-collar workers, meanwhile, are feeling restless and unproductive. Working from home may become more common, but most people seem eager to get back to the office — especially if the alternative is a combination workplace/schoolhouse.

And:

…the crisis is serving up a very different and inferior bargain than the one many original UBI supporters advocated. Institutionalizing emergency measures designed to respond to Covid-19 would be irresponsible. It would entrench UBI without the prerequisite productivity boom from artificial intelligence and automation. (For some time it appeared the opposite might happen — namely, an AI boom but no UBI.)

I can report that Garry was a real pleasure to work and co-author with.  Here is my earlier Conversation with him.

Coronavirus sports markets in everything, multiple simulations edition

For $20, fans of German soccer club Borussia can have a cut-out of themselves placed in the stands at BORUSSIA-PARK. According to the club, over 12,000 cut-outs have been ordered and 4,500 have already been put in place.

Here is the tweet and photo.

And some sports bettors are betting on simulated sporting events.  (Again, I’ve never understood gambling — why not save up your risk-taking for positive-sum activities?  Is negative-sum gambling a kind of personality management game to remind yourself loss is real and to keep down your risk-taking in other areas?)

Via Samir Varma and Cory Waters.

Whether or not we are living in a simulation, *they* are living in a simulation

Savers at the Bank of Nook are being driven to speculate on turnips and tarantulas, as the most popular video game of the coronavirus era mimics global central bankers by making steep cuts in interest rates.

The estimated 12m players of Nintendo’s cartoon fantasy Animal Crossing: New Horizons were informed last week about the move, in which the Bank of Nook slashed the interest paid on savings from around 0.5 per cent to just 0.05 per cent.

The total interest available on any amount of savings has now been capped at 9,999 bells — the in-game currency that can be bought online at a rate of about $1 per 1.9m bells.

The abrupt policy shift, imposed by an obligatory software update on April 23, provoked a stream of online fury that a once-solid stream of income had been reduced to a trickle with the stroke of a raccoon banker’s pen.

“I’m never going to financially recover from this,” one player wrote on a Reddit forum. “Island recession incoming,” said another.

Here is more from the FT, via Malinga Fernando.

Tethered pairs and locational extremes

Let us assume that you, for reasons of choice or necessity, are spending time in close quarters with another person.  You are then less inclined to visit corona-dangerous locations.  In part you are altruistic toward the other person, and in part for selfish reasons you do not wish to lower the common standard of care.  If you go to a dangerous location, the other person might decide to do the same, if only out of retaliation or frustration.

In essence, by accepting such a tethered pair relationship, you end up much closer (physically, most of all) to one person and much more distant from the others.  You are boosting your locational extremes.

The physically closer you are to the other person, the more easily you can tell if he or she is breaking the basic agreement of minimal risk.  That tends to make the tethered pairs relatively stable.  Monitoring is face-to-face!

Tethered pairs also limit your mobility, because each of the two parties must agree that the new proposed location is safe enough.

People who live alone, and do not know each other initially, might benefit from accepting a tethered pair relationship.  The other person can help them with chores, problems, advice, etc., and furthermore the other person may induce safer behavior.  (Choose a carpenter, not a specialist!)  Many people will take risks if they are the only loser, but not if someone else might suffer as well.

A tethered triplet is harder to maintain than a tethered pair.  For one thing, the larger the group the harder it is to monitor the behavior of the others.  Furthermore, having a third person around helps you less than having a second person around (diminishing marginal utility, plus Sartre).  Finally, as the group grows large there are so many veto points on what is a safe location ( a larger tethered pair might work better with a clear leader).

Yet over time the larger groups might prove more stable, even if they are riskier.  As more things break down, or the risk of boredom and frustration rises, the larger groups may offer some practical advantages and furthermore the entertainments of the larger group might prevent group members from making dangerous trips to “the outside world.”

There is an external benefit to choosing a tethered pair (or triplet, or more), because you pull that person out of potential circulation, thus easing congestion and in turn contagion risk.  Public spaces become safer.

As you choose a tethered pair initially, the risk is relatively high.  The other member of the pair might already be contagious, and you do not yet have much information about what that person has been up to.  As the tethered pair relationship proceeds, however, it seems safer and safer (“well, I’m not sick yet!”), and after two weeks of enforced confinement it might be pretty safe indeed.

Very often married couples will start out as natural tethered pairs.  At the margin, should public policy be trying to encourage additional tethered pairs?  Or only in the early stages of pandemics, when “formation risk” tends to be relatively low?  Do tethered pairs become safer again (but also less beneficial?), as a society approaches herd immunity?

It may be easier for societies with less sexual segregation to create stable tethered pairs, since couple status is more likely to overlap with “best friend” status.

One advantage of good, frequent, and common testing is that it encourage the formation of more tethered pairs.

You can modify this analysis by introducing children (or parents) more explicitly, or by considering the varying ages of group members.  You might, for instance, prefer to be a tethered pair with a younger person, but not everyone can achieve that.

The world is running a disturbing psychometric test

Put aside the people with small (and not so small) children at home, and observe whether the pandemic has boosted or destroyed their productivity.  That is one measure for how they handle stress, and whether you might wish to trust them with a start-up or some other major project requiring quick adaptation and performance under duress.  It may or may not be a measure for their ordinary performance on the job.

Consider the now-cancelled Candidates’ chess tournament in Russia.  Ding Liren was one of the two clear favorites (with Caruana), and he lost three games in the first half of the tournament.  That is evidence he does not play well under an extreme degree of stress.  Yet he still is rated #3 in the world, from a career playing under conditions of “not a pandemic level of stress but still world-class levels of competitive stress.”

Grischuk had been saying the tournament should be called off, even in midstream.  Probably he was right, but if play had continued would you have predicted him to come in first?  Caruana, the American, was worried he may not be able to get home after the tournament.  His play was OK but subpar, at least for a world-ranked number two.  The non-favored but sturdy Nepomniachtchi was up three games, before unwisely playing a Winawer defense with the black pieces, but still he was the clear leader.  How should we now revise our opinions of him?

A friend of mine writes to me:

I have submitted 4 papers in 2 weeks. Two R and Rs [revise and resubmits] done and sent back and two new papers sent out. Very close on 2 more. Then I guess I’ll start freaking out or something. Working is keeping me less stressed and more sane.  You can really see the divide on Twitter between people getting shit done and people spending all their time hyperventilating.

David Brooks (NYT) considers how you have been living your life.

The psychometric stress test is being run, including on our institutions, regions, and nations.  We’ll see how it goes.